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The purpose of this blog is help people improve their Mind, Body, Soul (relationships) and their Money.

Friday, May 16, 2014

Debt Free interview #2 - Stephanie from the Empowered Dollar

This week's debt free interview comes from Stephanie at the Empowered Dollar. An incredible journey of debt freedom over a period of just under 4 years.

1How did you get into debt? Student Loans from College.

2How deeply in debt were you at the worst point?
What did it feel like? $34,579.

I now had the degree. But shaking the chairman’s hand while he gave
me my diploma, I felt like I’d been entered into a deceptive contract:
“Here’s your diploma. That’ll be $30,000, paid off in monthly
installments for the rest of your life.” I felt like BU hadn’t fulfilled
it’s end of the deal. At that moment, I had no income. The only money
to my name was debt. I had no significant savings. I had no job
prospects. Instead of feeling financially free and independent, I felt
chained down by a mountain of student loans.

What had I gotten myself into and why hadn’t someone warn me?

I continued working as an intern after graduation, making $1,000 a
month. At first, it was bearable. I lived in a cozy apartment with three
other girls in a similar post-grad limbo. We would sit around our
fold-out kitchen table late at night, commiserating about how unprepared
we felt to deal with the real world.In the meantime, I was beginning to rack up credit card debt. Any
unexpected expense became a credit card change; I just didn’t have the
savings or the cash flow to deal with it. I was also uninsured and
struggled to consistently pay for my prescription medication. I looked
for ways to cut back on my expenses. I stopped going out on weekends. I
cut back on groceries, like fresh produce – significantly more expensive
than the packaged variety in the freezer aisles of the grocery store.
Meanwhile, the pressure of finding a real job was getting to me. I was
cracking.

3 3 When did you decide to get out of debt and why? July 15, 2009. It’s 1 a.m., and I can’t sleep....The real reason I can’t sleep has little to do with my accommodations or
my hunger pangs. I’ve been crying off and on for the past three hours. I
feel hopeless, worthless, and depressed. I’m $30,000 in debt. I’m
making $1,000 a month. And I know I can’t survive like this for much
longer.

4 How long did it take you to get completely debt
free? under 4 years

5 What advice would you give to someone trying to
become debt free? Stephanie has 5 strategies to crush your debt in no time...

a) Hustle - "I honestly thought that I would be able to pay off all of my student
loans in a year while earning $48,000. HA. HA. HA. (It’s okay, you can
laugh, too). ....I began reaching out to companies doing interesting work and offered to
work for them for free – which I later turned into paid consulting."b) Negotiate - "How much did I earn just by asking over the last 4 years?I earned $13,000 in bonuses and salary adjustments through negotiation."

c) Allocate - "The biggest mistake I made out of college? I used my checking account balance as my budget. If
I had $1,000 in my account, I felt like I had $1,000 left to spend. So
before you start getting used to your fat paycheck, allocate what you
need for fixed expenses and student loans in a quick,
back-of-the-envelope budget."

d) Prioritize - "If you want to tackle tens of thousands in debt in a few short years,
paying off your student loans has to become one of your top 3 financial
priorities – and that means ruthlessly cutting down on the things that
don’t matter."

e) Motivate - "Declare your intentions. Announce it to the world. Tell your family,
friends and dog that you’re going to tackle your debt once and for all
and you need their help staying accountable. The biggest motivation for
me came from publicly declaring my debt goal online."

To Hear more about these strategies or Stephanie's journey from this point forward - please check out her blog EmpoweredDollar.com